How to buy a foreclosure or short sale

I'm in the market for a new home, but money is tight. I'd like to consider buying a foreclosure or a short sale, but have heard that a lot of agents don't bother with these (especially foreclosures). Anyone know of a way to find those that are being sold? I've heard of lists of foreclosures, but they always ask for $$$.

Thanks in advance!

Re: How to buy a foreclosure or short sale

first- please never pay for a list of foreclosures or short sales

any realtor can pull you the list off MLS for free

those pay site are not often updated and not accurate

second- buying a foreclosure and buying a short sale are very different processes

the main issues with short sales are the agents who don't understand them and are trained to handle them

I am a certified distressed property expert- I took an intensive class and regularly take additional training directly from the banks

There is also a common misconception that you are actually saving money buying a short sale- that is not always true- the banks generally do not approve below market value prices

the short sale benefits the seller

As for foreclosures- they are difficult to buy as "owner occupant" because investors with cash buy the good ones and are willing to pay over asking price for them

As far as getting a mortgage on a distressed property you often need to get a rehab loan or 203K to cover the cost of repairs-

If you want to send me an FM I can email you a list of properties in the area and price range you are looking in- you will be surprised to find many "regular" listings that are affordable

Message edited 8/3/2011 10:48:26 AM.

Re: How to buy a foreclosure or short sale

Hi -

I have the ability to search current listings for short sales and foreclosures. If you want to FM me your preferred towns and criteria, as well as your email address, I would be happy to send you a list - no obligation. I wouldn't pay $ to get a list; any realtor can do it for you. And I've heard those lists from companies who charge are not necessarily accurate or up-to-date.

Are you working with a realtor already?

As far as the process -- the short sales can take longer, because you need to get bank approval for the sale. And it can take awhile before a bank will accept, reject, or counter your offer. How long it takes depends on the bank, the seller (and how cooperative and organized they are), and the real estate agents (how experienced are they with short sales). You definitely need a good real estate attorney who is well-versed in short sales. If you have a specific time period in which you need to buy, a short sale may not be for you, as there is uncertainty as to how long they may take. Also, while you can get a good deal, now banks are being less free with their short sale approvals; they want to make sure they recoup as much $ as possible, so you don't always get short sales for way below market value these days. The banks get broker price opinions (basically, appraisals) to ensure they are getting a fair price.

Foreclosures can be harder to buy. They are often bought by cash buyers or builders. They are usually in poor condition, requiring extensive renovation and repairs. I am referring to structural work and major systems (plumbing, heating, and electric, for example), not just cosmetic stuff. Often, you can't get a regular mortgage for this type of home; you need to get a 203(k) rehab loan, which is a type of FHA loan, in order to roll the costs of the repairs into your mortgage. But if you have the time and desire to take on a major project, you can get good deals on foreclosures.

Prices are low right now in general, so you may want to explore what you can get in your price range if you look at regular sales (or at least don't rule them out in favor of exclusively looking at short sales and foreclosures).

Feel free to FM me with more questions, or if you want me to pull the list for you. I'd love to help!